Sunday, September 21, 2008

Read any story, online or in print, about the Liberal Party’s “Green Shift” and you will learn two things. First, that the Green Shift is a “carbon tax”. Second, that it is complicated.

The first is inaccurate. The second is just false.

We could discuss how these memes have spread, who is to blame, and the general warping of reality in modern politician campaigns (say something, anything, enough times and it might become true). I’ll leave that to the political bloggers. Here, let's cover the truth about the Green Shift.First, the Green Shift is an economic plan. The main feature of the plan is a small shift in taxation from income to carbon-based fuels. Yes, the plan features a carbon tax. It also features income tax cuts, corporate tax cuts, tax credits for green investments, tax credits for rural and northern communities, and tax credits for middle class families. Labeling the Green Shift a carbon tax is defining an economic plan based on one incomplete component; you could just as soon call the Green Shift an income tax cut.

Second, it is not complicated. Here’s how it works. The tax on carbon-based fuels begins at $10 per tonne of carbon, and will increase by $10 a ton until reaching $40 in the fourth year. At the same time, income and corporate tax cuts will return the revenue from the carbon-based fuel tax to consumers and the marketplace. Government revenue will not change.

In fact, the Liberals are so vigilant about the tax shift being revenue neutral that the plan will require the Auditor General to evaluate the revenue every year. If there is a net increase in government revenue, it will be returned to taxpayers. There you go. That’s essentially the plan. Not complicated.

Now, working out the exact impact on your taxes and your fuel, heat and electricity expenditures requires a bit of math. Of course it does. That is true every time there is a change in the tax code or a change in government.

It is an insult to Canadians to keep calling this too complicated. If anything, the Green Shift is actually simpler than the tax plans put forth by the other parties. The Green Shift integrates all the major tax changes into one plan, one document. It is easy to read and evaluate. The other parties are announcing tax changes one by one, making it difficult to assess the aggregate impact on personal, or federal, finances.

I am not advocating for the Liberal Party or the specifics of the Green Shift. I am advocating for a real, intelligent, honest discussion about reducing Canada's greenhouse gas emissions.